Coin360 Daily Dispatch (Apr 28, 2023): Crypto Market Updates & Highlights

Crypto Market Update: Coinbase Warns SEC of Potential Lawsuit, Says None of its Tokens are Securities

Written by Van - Perfected by ChatGPT

Cryptocurrency exchange Coinbase has warned the US Securities and Exchange Commission that it would be a well-resourced adversary if the regulator chose to sue it over allegations of securities law violations. In its response to a "Wells notice" sent by the agency, Coinbase argued that none of the tokens listed on its exchange are securities, and that the SEC is not making a genuine effort to provide clear regulatory guidelines to the sector. Coinbase has filed a lawsuit in which it asks the court to compel the SEC to respond to a July 2022 petition for greater clarity.

South African Bitcoin Operator Ordered To Pay $3.4B In Penalties By U.S. CFTC

The U.S. Commodities Futures Trading Commission has been awarded $3.4 billion in penalties following fraud allegations against South African-based bitcoin operator Mirror Trading International (MTI) and its founder, Cornelius Johannes Steynberg. The CFTC alleged that Steynberg used MTI to collect 29,421 BTC from 23,000 people without registering with any watchdog in the U.S., and the court ruled that the founder is liable for fraud and failing to align his firm with Commodity Pool Operator rules.

Hong Kong Set to Release Guidelines for Crypto Exchanges and Encourage Bank Support

Hong Kong's Securities and Futures Commission plans to publish guidelines on licensing crypto exchanges in May, while the regulator and the Hong Kong Monetary Authority are encouraging banks to provide accounts for virtual asset service providers. The announcement comes as Hong Kong looks to position itself as a crypto-friendly destination despite growing pressure in the US and Europe. In February, reports emerged that Hong Kong was planning to lift a ban on retail trading of cryptocurrencies.

Binance Enters Japanese Crypto Market by Acquiring Sakura Exchange BitCoin

Binance is set to re-enter Japan's crypto market by acquiring licensed trading venue Sakura Exchange BitCoin (SEBC) and rebranding it as Binance Japan. The move comes five years after Binance exited Japan due to regulatory pressure. The deal allows Binance to operate as a Japan Financial Services Agency (JFSA) regulated entity, complying with the watchdog's policies. SEBC CEO Hitomi Yamamoto expressed delight and said the acquisition would assist users in gaining access to crypto services needed for mass adoption in the future. Binance has been widening its global reach and re-entry into Japan marks its 12th sanctioned operation.

PayPal's Venmo Enables Cryptocurrency Transfers to External Wallets and Exchanges

PayPal is rolling out a feature that allows its 60 million Venmo customers in the US to transfer cryptocurrencies to external wallets and exchanges. The move comes almost a year after PayPal allowed users to send supported tokens to external wallets. While a recent survey showed two-thirds of Americans don't trust crypto, it remains popular among millions in the US. Venmo processed $245.3 billion in fiat currency transactions in 2022, according to a recent PayPal earnings statement.

Robinhood Launches Robinhood Connect for Cryptocurrency Transactions in External Apps

Robinhood has launched a new feature called Robinhood Connect, which enables users to access its cryptocurrency features from external applications. The feature will initially be added to two crypto wallets, Phantom and Exodus, before being extended to other applications in the future. Users will be able to fund their Web3 wallets without logging into their Robinhood Crypto account, and the feature will also allow users to trade assets through Robinhood's cryptocurrency exchange. Robinhood launched its non-custodial iOS wallet in January 2023.

Over 1,000 Alleged GRU, FSB, and SVR Bitcoin Wallet Addresses Exposed in Chainalysis Report

Blockchain intelligence firm Chainalysis has reported that nearly 1,000 Bitcoin wallet addresses that allegedly belonged to the GRU, FSB, and SVR, have been exposed by an unknown person or group. Three addresses have reportedly been linked to Russian entities involved in hacking incidents including the SolarWinds attack of 2020 and the Russian election disinformation campaign in 2016. The anonymous group spent over $300,000 worth of bitcoin to post certain messages on the Bitcoin blockchain.

Bitcoin Traders Brace for Sell-Off as Tens of Thousands of BTC Move to Exchanges

BTC stayed around $29,000 at the April 28 Wall Street open despite U.S. macro data. The Personal Consumption Expenditures Index didn't shock the market, and attention turned to macro events of the coming week, headlined by the Federal Reserve interest rate decision. The odds of a further rate hike gained momentum, while at least two rate cuts are expected this year. BTC price action remained uncertain, with traders focusing on the longer-term trend and the possibility of a "slow bleed" to just below $29,000.

Tens of thousands of Bitcoin are moving to exchanges and traders are preparing for a sell-off, according to Coinglass. Binance's balance of BTC has increased by over 50,000 BTC ($1.5 billion) in the last month, while other major exchanges have seen insignificant balance increases or losses. Bulls are under pressure to flip the $30,000 level to support and continue rising, with $35,000 now a key zone for liquidating leveraged BTC short positions. The long short ratio indicates there are more shorts than longs, with nearly $1 billion in open interest suggesting many are shorting the $30,000 resistance.

Large Investors Bet on Ethereum's Future with $20 Million Block Call Trades

Block call option trades on Ethereum (ETH) exceeding a value of $20 million suggest that large investors are bullish on the cryptocurrency's future. Implied volatility (IV) is expected to decrease, which could contribute to a more predictable market for investors. Despite the recent price decline, ETH's negative MVRV ratio indicates it is oversold, while a growing long/short difference shows that holders are unlikely to sell at a loss. Ethereum has also proposed changes to its network protocol to make transactions cheaper and more secure.

Google Cloud partners with Polygon Labs to facilitate developer integration on Polygon 

Google Cloud has partnered with Polygon Labs to simplify developer integration to build, launch and grow Web3 products and decentralized applications (DApp) on Polygon. The Polygon ecosystem will benefit from Google Cloud's technology to advance its zero-knowledge development and assist with expensive overheads of acquiring, maintaining and operating dedicated blockchain nodes. Early-stage Polygon Ventures-backed startups will also be able to receive Web3-specific benefits from the Google for Startups Cloud Program.

Ripple Reports Selling $361 Million of XRP in Q1 2021 as Demand Rises

Ripple sold over $361 million worth of XRP tokens in Q1 2021, citing increased demand for its on-demand liquidity product, according to its XRP Markets Report. The firm sourced XRP from the open market to ensure supply meets demand from its growing business. While Ripple and XRP are separate entities, Ripple uses XRP and its public blockchain to power its global payment products. Decentralised exchange volume rose 34% from Q4 2020 to $115 million, said Ripple.

Filecoin Launches FWS But Decline in Core Developers Raises Concerns

Filecoin has launched Filecoin Web Services (FWS), an open-source competitor to Amazon Web Services, Google Cloud Platform, and Azure. FWS aims to provide a cloud-level developer experience and harness the transparency and open-source advantages of decentralized networks. However, Token Terminal has warned that the number of core developers working on Filecoin is constantly declining as it diversifies its product offerings.

Zcash Releases New Software Version 5.5.0 with Proportional Fee Mechanism and Fund Availability

Zcash has released a new version of its full node software, version 5.5.0, which includes bug fixes, a proportional fee mechanism and lays the groundwork for future functionality. The software introduces fund availability, allowing users to spend funds before a wallet is fully synchronized. The company is working to exit "Emergency Mode" and focus on delivering a solid and reliable user experience. At the time of writing, ZEC was down -1.4%.

TerraClassic Community Proposes Re-Pegging USTC Token to Dollar with Divergence Mechanism

The TerraClassic community is discussing a new proposal to re-peg the USTC token to the dollar. The proposal includes a divergence mechanism designed to stabilize the value of TerraClassicUSD by applying fees on trades that deviate from the pegged price, which would go towards buying back USTC to maintain the peg. The community would own the repurchased USTC and a new liquidity pool would be opened to go into a one-way swap of LUNC to USTC. The Terra ecosystem collapsed in 2020, but Terra Classic carries on with a 1.2% tax burn on all transactions.

EthereumPoW Draws Criticism for Lack of Updates Since Launch

EthereumPoW, a fork of Ethereum that preserved the original energy-intensive proof-of-work consensus mechanism, appears to have made no updates to its fork of the Go Ethereum client since launch. Its lack of action has drawn criticism from the executive director at ETC Cooperative, who tweeted: "That such a low-effort affinity project has over $300 million market tells us how little 'signal' there is in price." EthereumPoW's Geth code on GitHub shows no commits in over seven months.

0VIX Suffers $2 Million Loss in Flash Loan Exploit, TVL Drops by $4.7 Million

Decentralized finance protocol 0VIX lost $2 million in a flash loan exploit, with 1.45 million USDC and other tokens stolen before being bridged to Ethereum's mainnet. The protocol previously had $6.4 million in total value locked, but this has now dropped to $1.7 million as investors withdrew their capital. The attack follows a $2 million rug pull on ZkSync-based decentralized exchange Merlin. 0VIX confirmed the attack on Twitter and is working with security partners to investigate the situation, with zkEVM paused as a precaution.

Summary of Market Events and Price Action

As a summary of today’s events and price action in the market, it is crucial to note the following key points:

• Coinbase warns SEC, says tokens not securities
• SA Bitcoin operator fined $3.4B by US CFTC
• Hong Kong to release guidelines for crypto exchanges
• Binance enters Japanese market by acquiring Sakura Exchange
• Venmo enables cryptocurrency transfers to external wallets
• Robinhood launches Robinhood Connect for external crypto transactions
• Chainalysis report exposes alleged Bitcoin wallet addresses
• Bitcoin traders brace for sell-off as BTC moves to exchanges
• Large investors bet on Ethereum with $20M block call trades
• Google Cloud partners with Polygon Labs for developer integration
• Ripple sells $361M of XRP in Q1 2021
• Filecoin launches FWS, but concerns raised over core developers
• Zcash releases new software version with proportional fee mechanism
• TerraClassic proposes re-pegging USTC token with divergence mechanism
• EthereumPoW criticized for lack of updates since launch
• 0VIX suffers $2M loss in flash loan exploit, TVL drops

Top Altcoin Gainers and Losers

Gainers:
Internet Computer ICP (+6.92%)
Conflux CFX (+6.51%)
Render Token RNDR (+4.71%)

Losers:
Injective INJ (-8.47%)
Frax Share FXS (-5.04%)
Radix XRD (-4.92%)

NFT Market Map
According to a report by DappRadar, Yuga Labs, the creator of the Bored Ape Yacht Club (BAYC), dominates the NFT market, accounting for nearly 35% of all NFT trading volume between October 2022 and March 2023. Yuga Labs also acquired the CryptoPunks and Meebits NFT project IP from original creator Larva Labs in 2022. BAYC, the leading NFT profile picture, has a floor price of $99,000. The company has emerged as a leading example of commitment to providing value and nurturing its NFT holder community. Yuga Labs also won legal victory when a judge declared that art project RR/BAYC was a parody of Yuga's project.

Most non-fungible token (NFT) collections are down in price, with only three out of the top 10 NFT collections seeing gains in Ethereum value over the past month, according to IntoTheBlock. Four of the 20 most valuable collections by market cap are up. Some collections, such as Moonbirds and Doodles, are trading near their all-time lows, losing more than 80% of their value in Ethereum terms. NFT-related trademark filings in the US have also dropped by two-thirds. However, the market is still evolving, and volatility is not uncommon in emerging markets.